A single blanket limit inclusive of real property, personal property, business interruption and boiler and machinery provides retail clients with optimum flexibility during large losses.
Single blanket-limit coverage provides retail clients with greater flexibility. Let's say there is a significant fire loss at a warehouse with reported inventory (personal property) values of US$25 million. Unfortunately, this fire occurred during peak inventory time and there was actually US$35 million in inventory at the time of the loss. If the client has separate limits for real property (RP) and personal property (PP) their PP loss may be limited to the reported US$25 million. However, if they have one single blanket limit, there is some buffer for the PP values to use the total limit of US$135 million.
In addition, AFM's proVision policy gives coverage on a replacement-cost basis with no margin clause or coinsurance.
Read more to see the benefits of embedding boiler and machinery coverage in the proVision retail form and single blanket limit.
Sublimits: Traditional machinery and equipment breakdown policies limit coverage for spoilage, ammonia contamination and hazardous substances. The proVision policy removes these coverage limitations. In addition, expediting expense coverage, typically only found in M&E policies is included in the all-risk policy, extending this coverage to losses beyond just those that are M&E-related.
Broad definition of covered property: M&E policies typically have to name the type of property insured, such as boilers, fired and unfired pressure vessels, as well as electrical, mechanical and production equipment, which are included in the definition section of the form. With M&E in the all-risk platform, coverage is now broadened for all types of property, unless otherwise excluded.
Broadened cause of loss wording: With M&E coverage embedded into an all-risk form, clients receive broadened coverage for all direct physical loss or damage to insured property, unless otherwise excluded.
Joint loss agreements: When there are separate property and M&E policies, and an M&E event causes damage to property outside of the scope of the M&E policy, there can be complications in settling the claim between the M&E carrier and the all-risk property carrier. These complications are removed when it is all insured under the same policy.